Folsom’s hidden economy

Quick – where would you go to find 40 percent of Folsom business owners?
You’d go to their homes.
It’s well known that businesses selling information or services, not products, now dominate the national and local economies. Lesser-known is the share that operate with no storefront. But the concept is catching on – the phrase, “Undress for success” has made its way into self-help books.
“With a home-based business, you’ll find yourself working in your jammies, which is good, but it can be a downfall, too – you stay in your jammies and don’t get out (to market the business),” said Sue Field, owner of Folsom-based Bright Beginnings greeting service.
As the economy slid from ho-hum to bad between 2005 and 2006, the number of new home-based businesses licensed in Folsom also slid – 21 percent, from 322 to 245, said Sue Ryan, information officer. However, as it went from bad to worse in 2007, new licenses climbed, to 283. And, that up trend has continued during a much worse 2008.
“I work as a business coach for people who want to own a business, working by phone with people all around the country, but I want to make a switch and work more locally,” said Lorraine King, owner of Folsom-based Entrepreneur’s Source. “Now’s the time to start a business, but emotionally, it’s hard to do.”
With time remaining in 2008, home-based startups in Folsom are back nearly where they were in 2005 – to 316. And as 2008 rolled around, existing home-bases were succeeding, judging from the fact that license renewals for home-based business were climbing steadily – from 1,119 in 2006 to 1,351 so far in 2008.
“We’re a little stronger this year,” said Sally Howard, communications director for the Folsom Chamber of Commerce.
King didn’t mention low overhead as the reason for choosing a home base.
“I chose it for the flexibility,” she said. “I have a high-maintenance, special-needs kid. A lot of people need to be home (instead of working outside), and say, ‘OK, I’m home, and now there’s less money coming in – what do we do?’”
Michael Wilmer, co-owner of Folsom-based Bannon Creek Photography, evolved from a traveling contractor unable to use a storefront to an entrepreneur uninterested in tackling a high nut to make on overhead.
“With no heavy burden of a storefront, cash flow is not as important to me,” Wilmer said.
Slightly more than half of all firms nationally are home-based, a share even higher than Folsom’s, according to the federal Small Business Administration. They account for hundreds of billions of dollars in business receipts. The SBA calls them “the hidden economy.”
An SBA report states that although Americans increasingly are turning to home-based start-ups for a primary income, home-business owners as a whole tend to work fewer than 40 hours per week. The agency also calls for reform of laws governing home businesses.
The Telegraph’s Roger Phelps can be reached at rogerp@goldcountrymedia.com or post a comment at folsomtelegraph.com.